Transfer of Property Tax Base for Senior Citizens

Nov 27, 2016 09:52AM
● By Elena Hutslar

On
November 4, 1986, the voters of California passed Proposition 60 to provide to
qualified homeowners the transfer of the base-year value of their principal
residence to a replacement dwelling located in the same county, under certain
circumstances.

The
requirements for this exclusion are:

1.
At
the date of transfer of the original property, the transferor (seller) must be
at least 55 years of age. (If married, only one spouse must be at least 55, but
must reside in the residence; if co-owners, only one co-owner must be at least
55 in the residence.)

2.
The
replacement property must be purchased or newly constructed on or after
November 5, 1986. The replacement residence must be purchased or newly
constructed within two years before or after the sale of the original
residence.

3.
The
sale of the original residence must qualify for reassessment as the result of
its transfer.

4.
The
principal claimant must have been (1) receiving, or eligible for, a Homeowner's
Exemption or (2) have been receiving a Disabled Veteran's Exemption on the
original and replacement residences.

5.
The
replacement residence must be "equal to or lesser" in market value
than the original residence. In general, "equal or lesser" than
market value of a replacement dwelling has been defined as: 100% of market
value of original property as of its date of sale if a replacement dwelling is
purchased before an original property is sold; 105% of market value of original
property as of its date of sale if a replacement dwelling is purchased within
one year after the sale of an original property; 110% of market value of
original property as of its date of sale if a replacement dwelling is purchased
within two years after the sale of an original property.

6.
The
claimant and/or claimant's spouse can only be granted relief under this section
once. The disclosure of social security numbers by all applicants is required.
They are used by the assessor to verify the eligibility of persons claiming
this exemption and by the State to prevent multiple claims in different
counties. This claim is not open to public inspection.

If
you feel you meet the qualifications for this exclusion, you must provide
evidence and/or declare under penalty of perjury that you are at least 55 years
old, and complete the claim form. The claim for relief must be filed within
three years of the date a replacement dwelling is purchased or new construction
of the replacement dwelling is completed.

To
obtain a claim form, call the Assessor's Office at (925) 313 7400, or write to:

Q.
Is it true that only one claimant, out of several co-owners of a replacement
dwelling, must be at least age 55 as of the date of sale of an original
property in order to qualify?

A.
Yes. Only one claimant/occupant (or his/her spouse who was also an occupant)
who was a qualified record owner of the original property must be at least 55
years of age.

Q.
Can a taxpayer apply for and receive the benefit of Proposition 60 numerous
times during the course of his/her lifetime?

A.
No. Only claimants who have not previously been granted this property benefit
are eligible.

Q.
When making the "equal or lesser value" test comparison, is a simple
comparison of the sales price of the original property and the purchase
price/cost of new construction of the replacement dwelling all that is needed?

A.
No. The comparison must be made using the full market value of the original
property as compared to the full market value of the replacement dwelling as of
its date of purchase/completion of new construction. This is important because
the sales/purchase price is not always the same as market value. The assessor
must determine the market value for each property, which may differ from the
sale price.

Q.
If the current full cash value of my replacement dwelling slightly exceeds the
"equal or lesser value" test as compared to the full market value of
my original property, can I receive partial benefit?

Q.
Can two otherwise qualified taxpayers who have recently sold their separately
owned original properties combine their claim for Proposition 60 benefit when
they buy a single replacement dwelling together?

A.
No. They can only receive benefits if one or the other, not both, qualifies by
comparing his/her original property to the jointly purchased replacement
dwelling.

Q.
May I give my original property to my son/daughter and still receive the Proposition
60 benefit when I purchase a replacement property?

A.
No. The law provides that an original property must be sold for consideration
and subject to reappraisal at full market value at the time of sale. Original
property transferred to a child or disposed of by gift or devise does not
qualify.

Q.
Isn't the assessor precluded under Proposition 60 from issuing supplemental
assessments when the factored base-year value is transferred from an original
property to a replacement dwelling?

A.
No. When the replacement dwelling is purchased or newly constructed, the
assessor is mandated by law to issue supplemental assessments (positive or
negative) for all transactions that result in a base-year value change,
including those that qualify under Proposition 60.This is accomplished by
comparing the factored base-year value of the original property to the factored
base-year value of the replacement dwelling property.

Q.
After receiving the notice that my application has been granted, do I still need
to pay both installments of the secured tax bill at the higher value?

A.
Yes. Any reduction in value will be refunded in the form of a negative
supplemental. Please be aware that the refund may not arrive before the second
installment of the secured tax bill is due. No adjustments are made to the
secured tax bill to reflect the Proposition 60 exclusion.

Q.
If a qualified claimant first sells his/her original property and then
transfers its existing factored base-year value of $60,000 to a subsequently
acquired replacement dwelling that has an existing taxable value on the roll of
$40,000, should a supplemental assessment be levied for $20,000 as of the date
of purchase of the replacement property?

A.
Yes, assuming the current market value of the replacement dwelling exceeds the
new base- year value which resulted from a change of ownership of the
replacement dwelling. Although the new base-year value was transferred from the
original property, it results in a supplemental assessment for the difference between
the new base-year value and the current roll value, or $20,000.

Q.
Is it true that a replacement dwelling may be acquired any time within two
years (before or after) of the date of sale of the original property?

A.
Yes, provided the replacement dwelling is acquired on or after November 6,
1986.

Q.
If a lot is purchased and a home constructed, must the new construction be
completed within two years of the purchase of the lot?

A.
No. The replacement lot may be purchased anytime before the sale of the
original property; however, the new construction of the residence must be
completed within two years of the sale of the original property.

Q.
May I, as a former co-owner of an original property, receive partial benefit on
my replacement dwelling along with the other co-owners on their separate
replacement dwellings?

A.
No. The law provides that only one co-owner of an original property which
is/was qualified for the homeowner's exemption may receive the benefit in a
situation like this where all co-owners must determine, between themselves,
which ones should receive the benefit. Only in the case of a
multiple-residential original property where several co owners qualify for
separate homeowner's exemptions may portions of the factored base-year value of
that property be transferred to several qualified replacement dwellings.

Q.
Can an original property mobile home qualify for Proposition 60 when a
replacement property is acquired?

A.
Yes, but only if the mobile home is enrolled as real property. If it is not,
then the mobile home is not eligible since there is no real property base-year
value to be transferred.